Nationwide Misplaces £70,000 Over Mortgage Overpayment, Customer Seeks Full Explanation and Fair Compensation
Nationwide mistakenly misplaced £70,000 during a mortgage overpayment incident lasting about 10 days before the issue was resolved, with full correction taking 14 days in total. While the funds were not lost and credit was backdated to ensure the customer was not out of pocket, the error caused significant distress. The customer and his disabled partner experienced stress, sleepless nights, anxiety, and the partner was prescribed steroids as a result of the health impact.
Nationwide admitted fault and apologized, offering £200 as a goodwill compensation. However, the customer demanded a detailed explanation of where the money went and how much interest was earned during the period, which Nationwide did not disclose.
Consumer disputes expert Scott Dixon described the incident as a serious failure beyond typical service issues. He advised the customer to pursue a deadlock letter and escalate the complaint to the Financial Ombudsman Service (FOS). Dixon cited the FCA Consumer Duty rules and the Equality Act 2010 as grounds to seek fair compensation, highlighting potential discrimination considerations.
The Financial Ombudsman Service typically awards between £300 and £750 for distress and inconvenience, and higher awards ranging from £750 to £1,500 for documented health impacts. A fair settlement in this case could range between £750 and £1,000 plus interest.
The recommended course of action for the customer is to request a final response or deadlock letter from Nationwide and subsequently refer the matter to the FOS for review. Under FOS scrutiny, Nationwide could face a higher compensation payout.
Despite this incident, Nationwide has been named Which? Banking Brand of the Year 2025 but currently holds a Trustpilot rating of 1.9 out of 5 from over 7,600 reviews.
